Penn National Gaming, the Berks County-based owner of Hollywood Casino at Penn National Race Course in East Hanover Township, is spending more than $50 million just for the chance to bring a new casino to Central Pennsylvania.
Through its Mountainview Thoroughbred Racing Association LLC, based in Yoe, York County, Penn National bid $50.1 million today to beat out three other bidders for a new mini-casino license.
The smaller casinos were authorized under a state expansion of casino-style gambling in October, a law Penn National also is challenging in court. Today was the first Pennsylvania Gaming Control Board auction for the new gambling parlors, known as Category 4 casinos, which can house 300 to 750 slot machines and up to 40 table games.
Despite the LLC’s location, the casino may not be destined for Yoe specifically, as Penn National has yet to pick a location for future development. The small York County borough, about 10 miles from the Maryland border, would be the center of a 30-mile area in diameter that includes the city of York where Penn National could choose to develop the casino.
So a large swath of southern York County could come into play.
“We’re happy to be the winning bidder,” said Penn National spokesman Eric Schippers. “However, as reflected by our pending federal lawsuit against the (Category) 4 provisions in the Gaming Act, we’re not happy to have to be in the situation of paying this much to help protect our flank at Hollywood Casino. The Gaming Act put us in the perverse position of having to essentially bid against ourselves to protect our market share in Central Pennsylvania.”
He added: “Nonetheless, we think the area we’ve selected will provide us the best opportunity to play both defense and offense in terms of maximizing our combined investment in Pennsylvania and we’ll be seeking to generate incremental value for our shareholders.”
The Pennsylvania Gaming Control Board said the bid price must be paid within two business days and the high bidder has up to six months to submit a formal application on its plan. The application would contain the proposed location for the casino, building plans, amenities and employment projections, among other details.
What if your municipality opted out?
Penn National also must find a municipality willing to entertain development of a new casino. More than 150 municipalities in the midstate have initially opted out, including more than half of the municipalities in York County. However, the law allows local governments to opt back in one time to allow a mini-casino.
Schippers said the focus is on the areas that have not opted out within the 15-mile radius chosen.
Hollywood Casino, which opened in 2008, cost more than $300 million to build, according to Business Journal archives. It’s unclear how much a mini-casino might cost, Schippers said, because the budget will depend on number of slot machines and table games in the new casino.
The board has scheduled additional auctions through May for the other nine mini-casino licenses. The next auction is Jan. 24.
The minimum bid price is $7.5 million. An additional $2.5 million fee must be paid for permission to add table games.
Most likely landing spots
Looking at which municipalities are not on the opt-out list for York County, within the target area around Yoe and outside of the 25-mile exclusion area around Hollywood Casino, the list of likely destinations for a mini-casino includes several municipalities in the southeastern end of the county.
That would include: Red Lion, Chanceford Township, Hopewell Township, Loganville, Seven Valleys, Shrewsbury Township and Stewartstown.
However, it is very possible that Penn National selects a site closer to York, which is in the target area, along with North York and West York. West Manchester Township, along with neighboring Manchester and East Manchester townships, also did not opt out of hosting a casino.